Most Popular
1. It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- Gary_Tanashian
2.Stock Market Presidential Election Cycle Seasonal Trend Analysis - Nadeem_Walayat
3. Bitcoin S&P Pattern - Nadeem_Walayat
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
4.U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - Raymond_Matison
5. How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - Nadeem_Walayat
7.Bitcoin Gravy Train Trend Forecast 2024 - - Nadeem_Walayat
8.The Bond Trade and Interest Rates - Nadeem_Walayat
9.It’s Easy to Scream Stocks Bubble! - Stephen_McBride
10.Fed’s Next Intertest Rate Move might not align with popular consensus - Richard_Mills
Last 7 days
Stock Market Brief in Count Down to US Election Result 2024 - 3rd Nov 24
Gold Stocks’ Winter Rally 2024 - 3rd Nov 24
Why Countdown to U.S. Recession is Underway - 3rd Nov 24
Stock Market Trend Forecast to Jan 2025 - 2nd Nov 24
President Donald PUMP Forecast to Win US Presidential Election 2024 - 1st Nov 24
At These Levels, Buying Silver Is Like Getting It At $5 In 2003 - 28th Oct 24
Nvidia Numero Uno Selling Shovels in the AI Gold Rush - 28th Oct 24
The Future of Online Casinos - 28th Oct 24
Panic in the Air As Stock Market Correction Delivers Deep Opps in AI Tech Stocks - 27th Oct 24
Stocks, Bitcoin, Crypto's Counting Down to President Donald Pump! - 27th Oct 24
UK Budget 2024 - What to do Before 30th Oct - Pensions and ISA's - 27th Oct 24
7 Days of Crypto Opportunities Starts NOW - 27th Oct 24
The Power Law in Venture Capital: How Visionary Investors Like Yuri Milner Have Shaped the Future - 27th Oct 24
This Points To Significantly Higher Silver Prices - 27th Oct 24
US House Prices Trend Forecast 2024 to 2026 - 11th Oct 24
US Housing Market Analysis - Immigration Drives House Prices Higher - 30th Sep 24
Stock Market October Correction - 30th Sep 24
The Folly of Tariffs and Trade Wars - 30th Sep 24
Gold: 5 principles to help you stay ahead of price turns - 30th Sep 24
The Everything Rally will Spark multi year Bull Market - 30th Sep 24
US FIXED MORTGAGES LIMITING SUPPLY - 23rd Sep 24
US Housing Market Free Equity - 23rd Sep 24
US Rate Cut FOMO In Stock Market Correction Window - 22nd Sep 24
US State Demographics - 22nd Sep 24
Gold and Silver Shine as the Fed Cuts Rates: What’s Next? - 22nd Sep 24
Stock Market Sentiment Speaks:Nothing Can Topple This Market - 22nd Sep 24
US Population Growth Rate - 17th Sep 24
Are Stocks Overheating? - 17th Sep 24
Sentiment Speaks: Silver Is At A Major Turning Point - 17th Sep 24
If The Stock Market Turn Quickly, How Bad Can Things Get? - 17th Sep 24
IMMIGRATION DRIVES HOUSE PRICES HIGHER - 12th Sep 24
Global Debt Bubble - 12th Sep 24
Gold’s Outlook CPI Data - 12th Sep 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Silver Pyramid Power

Commodities / Gold and Silver 2014 Aug 06, 2014 - 06:50 PM GMT

By: DeviantInvestor

Commodities

Global annual silver production is approximately 820,000,000 ounces or a bit more than 25,000 metric tons. What does that mean in terms that we can more easily understand?

If the global annual mine production of silver were cast into one large silver pyramid, it would be approximately - wait for it - only 65 feet high on a base of only 65 feet square. Rather tiny! For future reference, this is one "silver pyramid."


At current market prices, the global production of silver would be about $16 Billion. It is difficult to understand and appreciate what an 11 digit number means, so the equivalents for $16 Billion - the market value of global annual silver production - are approximately:

  1. 6 days of Bernanke era Quantitative Easing at $85 Billion per month - you remember - digital dollars conjured from nothing for the supposed purpose of recapitalizing banks, levitating the stock market, and improving the US economy.

  2. 7 days of average increase in the official US national debt.

  3. 8 days of expenses for the US military

  4. 21 days of crude oil imports into the US.

  5. 7 months of bonuses for Wall Street.

  6. 1 / 250th of the balance sheet of the Federal Reserve

Summary:

The Federal Reserve was conjuring up enough dollars for QE to buy the equivalent of one silver pyramid every 6 days in the Bernanke era. In that context silver seems inexpensive and dollars seem overvalued.

The US military spends the equivalent of one silver pyramid about every 8 days and the official US national debt increases by one silver pyramid every 7 days. Borrowing and "printing" this many dollars cannot continue forever. Silver and gold will remain valuable long after the dollar has been inflated to near worthlessness.

Annual Wall Street bonuses are the equivalent of nearly two silver pyramids - nearly double the market value of the annual global production of silver.

Of course none of this means that the US spends too much or too little on Wall Street bonuses or the military, but it does make the current market price of global silver production look rather tiny by comparison.

I suspect that Wall Street bonuses and military spending will increase in the next five years. I also think the cost of one silver pyramid - the market price for global annual mine production - will increase substantially in the next five years - not because mine production will materially change, but because silver will be priced far higher in a few years.

GE Christenson aka Deviant Investor If you would like to be updated on new blog posts, please subscribe to my RSS Feed or e-mail

© 2014 Copyright Deviant Investor - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in